Real Estate & Construction

Attorney Katerina Tsoukalas-Heitkemper received a successful result for her condominium association client after an extensive four-month forensic investigation led by Kathy (with the assistance of her HOA law team and client) revealed that the Association’s former employee, a licensed on-site community association manager, had committed multiple acts of theft and employee dishonesty over a four year time-frame resulting in a financial loss to the Association in excess of $150,000.  A newly elected Board President asking lots of important questions at the beginning of her term churned up information that did not seem to “add up”.  This initial inquiry and the…
It is a widely held concept that the US is a “litigious society.” Therefore, it is unsurprising that litigation by Unit Owners against condominium and homeowners associations are not uncommon. These suits can range from allegations of breach of fiduciary claims to property damage claims or personal injury claims to allegations of negligence. Regardless of whether or not Unit Owner claims are meritless, association boards find themselves having to expend resources defending against these claims. Even in situations where associations are not sued, they may also find themselves having to expend resources in order to comply with recent case law…
Typically, the governing documents of an association consist of various documents including a declaration, by-laws and rules and regulations. Associations are also bound by statute—condominium associations are bound by the Illinois Condominium Property Act (“Condo Act”) and common interest communities are bound by the Common Interest Community Association Act (“CICAA”). Due to the variety of documents an association is bound by, confusion often arises when there are conflicting provisions and/or requirements in the governing documents or applicable statute. It is important to remember the following hierarchy when it comes to your association: Condo Act/CICAA Declaration By-Laws Rules and Regulations When…
Utah Appellate Court: Homeowners’ Claim for Defective Construction Against Geotechnical Engineer Dismissed Due to Lack of Contract and the Economic Loss Rule A recent Utah Appellate Court upheld the dismissal of a homeowners’ claims against a geotechnical engineer because the homeowners did not have a contract with the geotechnical engineer and therefore their claims were barred by the economic loss rule. See Hayes v. Intermountain Geoenvironmental Services, Inc., 2019 UT App 112, 2019 WL 2621931.  In Utah, the economic loss rule only allows lawsuits for defective design or construction to be based on a breach of contract.  Such a claim…
Each year, hurricane season presents a challenge to contractors and developers along the Gulf and Atlantic coasts as they face the risk of impacts from significant weather.  Hurricanes Michael, Irma, Harvey and Florence are only the most recent reminders of how devastating one of these storms can be.  With the construction industry being as active as it is, projects in storm-prone areas should be prepared to deal with and minimize the physical and financial risks that come along with these storms.  I was recently able to share my insight about what project teams can do to deal with a storm…
Owners of a Massachusetts waste collection, recycling and removal company recently were held personally liable for their failure to pay their employees at prevailing wages.  See Donis v. American Waste Services, LLC, 95 Mass.App.Ct. 317 (2019).  Under Massachusetts law, wage violations are subject to triple damages and payment of attorney’s fees.     The waste services company entered into contracts with several Massachusetts towns that required compliance with prevailing wage laws at hourly rates of $20 — $24.  However, the company paid workers $16 — $17 an hour, or at flat day rates.  The company tried several unsuccessful defenses: (1) the…
Getting members to participate in board member elections can be like pulling teeth. The more convenient you make the process, the more likely to get members to participate. Fortunately, the Illinois Condominium Property Act (the “Condo Act”) and the Illinois Common Interest Community Association Act (“CICAA”) allow Boards to adopt rules and regulations to permit electronic voting. Not only is electronic voting convenient, but it can save the association money by not having to pay for printing or postage.  Boards can always adopt dual systems of voting allow for those members who are not tech savvy to continue to vote in person via…
New Sustainability Ordinances for Construction Enacted in Florida and Colorado Cities  The City of St. Petersburg, Florida is one of the latest municipalities to incorporate the concepts of sustainable construction, sometimes referred to as “green building”, into the requirements of their municipal code.  On April 26, 2019, the City adopted Ordinance No. 359-H; which requires City-owned buildings over 5,000 square feet, which are either existing and being substantially modified or are being newly constructed, to achieve a rating of LEED Gold from the U.S. Green Building Council.   The new ordinance makes clear that the purpose of adopting the sustainability…
In a case of first impression, Maryland’s intermediate appellate court recently held that a subrogation waiver in an owner’s prime contractor contract does not bar a subcontractor claim for contribution against the prime contractor.  See Gables Constr., Inc. v. Red Coats, Inc., No. 907, SEPT.TERM, 2017, 2019 WL 2067348 (Md. Ct. Spec. App. May 10, 2019).  Upper Rock, Inc. (Owner) filed a $22 million claim against Red Coats, Inc., a “security and fire watch company” (Subcontractor), for fire damage to a building under construction.  Red Coats filed a third-party claim against the prime contractor, Gables Construction, Inc. (Contractor), for contribution…
Construction contracts often contain agreements requiring mediation before a party may file a lawsuit.  However, a party may not want to wait through the mediation process and instead may prefer to go straight to a lawsuit.  Given that mediation is not binding and does not guarantee a resolution, can a party ignore a contractual agreement to mediate and instead go right to litigation?  A recent Kentucky federal court decision said no, a party cannot ignore a previous contractual agreement to mediate. See Mitsui Mumitomo Insurance USA, Inc. v.  Denham-Blythe Company Inc., et al., No. 5:18-CV-152-JHM, 2019 WL 1938791 (E.D. Ky.…
In the context of homeowners and condominium associations, a proxy is a document authorizing a person to act or vote on behalf of an owner who is unable to attend a meeting. Proxies are most commonly used at board elections and owners wishing to run for a seat on the board of directors will often times go door-to-door collecting proxies ahead of elections. Although proxies are a powerful tool for board elections, both the Illinois Condominium Property Act (the Condo Act) and the Common Interest Community Association Act (CICAA) contain strict requirements for proxies. While proxies do not need to…
  Not all retail tenants can get a landlord to agree to a co-tenancy provision, but this still should be part of the tenant’s discussion with its broker or landlord.  A co-tenancy provision allows a tenant to pay a reduced amount of rent when certain conditions are not met either before the store opens or once the store is operating.  Usually, the condition is that certain other stores, such as anchors, or a certain percentage of stores in the center have to be open for business.  For example, if a certain anchor tenant plus 70% of the remaining space in…
  The Moorhead Law Group, LLC is pleased to announce that Midwest Real Estate News has selected the firm as one of the “Best of the Best” for 2018, placing the firm among the top regional law firms for real estate.   The Moorhead Law Group, LLC is Chicago-based, founded in 2012.  We primarily represent tenants across the U.S. in negotiating retail, restaurant, fitness studio, entertainment, school, office, and industrial/warehouse leases. We love working alongside clients to help their businesses grow. Clients range from entrepreneur start-ups to Fortune Top 10 multinationals.    Jamie Moorhead was formerly a partner in a large…
A recent article in the Baltimore Business Journal on a Maryland construction industry survey reports that tight labor markets and rising materials costs are influencing the opinion of Maryland contractors that there may be a downturn coming in the near future.  While contractors are individually optimistic about their own businesses, they recognize that the labor crisis is growing.  Fewer young people are entering the construction industry and over 80 percent of contractors surveyed responded that “finding and retaining quality employees” is their top concern.  Although salaries are generally on the rise, corporate culture appears to be a greater concern to…
Illinois Considers Following Trend Toward Making General Contractors Liable for Wages of Subcontractors A bill pending in the Illinois legislature (HB2838) exemplifies a nationwide trend in the construction industry to hold a contractor who has a direct contract with an owner (“Direct Contractor”) liable for the unpaid wage and fringe benefit obligations of its subcontractors on a private project. Direct Contractors already have liability for employee wages owed by their subcontractors on public projects covered by the Davis Bacon Act, and the same responsibility is owed under the prevailing wage acts of many states. Direct Contractors may also have liability…
Baseball Stadium Developer Owes Bond Insurer $39.1 Million Due to Indemnification Agreement A recent decision from the United States District Court for the District of Connecticut is a reminder to contractors and developers that indemnification agreements tied to bonds usually heavily favor and give a large amount of discretion to insurers issuing bonds.  See Arch Ins. Co. v. Centerplan Constr. Co., LLC, No. 3:16-CV-01891 (VLB), 2019 WL 613375, — F.Supp. — (D. Conn. Feb. 13, 2019).  In Arch, the court granted summary judgment in favor of Arch Insurance Company (“Arch”) and required developer Centerplan Construction Company (“Centerplan”) to indemnify Arch…